U.S. Supreme Court hears arguments to decide whether to restrict forums for patent infringement actions

By Melissa Busch | Apr 24, 2017

WASHINGTON – The U.S. Supreme Court recently heard oral arguments to determine whether patent infringement actions should be restricted to judicial districts where a defendant lives or where the infringement occurred.

The arguments heard on March 27 are a result of a patent infringement suit Kraft Foods Group Brands filed against TC Heartland over a low-calorie sweetener it produces.  

Kraft Foods filed the suit in Delaware, one of two districts that sees most of the nation’s patent cases. More than 40 percent of patent lawsuits are filed in the Eastern District Texas because the court has been known to rule on the side of plaintiffs. Since 2014, a single judge in the Eastern District of Texas has handled one-quarter of all patent cases nationwide, according to court records.

Companies often buy patents to demand royalties and sue for damages, not necessarily to use them. These types of businesses “forum shop” for courts that are likely to provide them with the most favorable outcomes.

TC Heartland, which is based in Indiana, unsuccessfully tried to have the case moved to Indiana. The lower courts rejected this based on a 1990 United States Court of Appeals for the Federal Circuit decision, which said defendants in patent cases can be sued anywhere they conduct business.

TC Heartland asked the high court to limit where defendants in patent cases are permitted to be sued. More than 40 companies, including eBay Inc., Adobe Systems Inc., FedEx Corp. and Walmart Stores Inc., and two associations submitted documents supporting Heartland.

“Indeed, forum shopping in patent litigation adversely affects innovation, which is contrary to the constitutional purpose of the patent system, namely, to promote the progress of science and useful arts. Justice cannot be administered blindly and fairly if one of the parties can engage in forum shopping in order to gain an advantage. To restore justice in patent cases, the court should resuscitate the patent venue statute by reaffirming that the court says what it means and means what it says,” according to court records.

Kraft argued that patent law hadn’t changed, but a more basic law concerning where suits can go has undergone amendments. It further claimed that those changes revised the law on patent cases, according to court documents.  

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